Workers’ Comp judges’ biases are as likely to determine the outcome of a disputed injury claim as the evidence is, regardless of how solid the evidence that the claimant committed fraud appears to be to the insurer’s attorney.
The legal field is not black and white. Things will be perfectly clear to an adjuster, but judges will see something entirely different in the evidence because of their biases. Many judges don’t like to find fraud. They don’t like the penal nature of the statute.
Biases are human nature, and everyone has a bias of some sort. The bias can be pro-business, pro-injured worker or somewhere in the middle.
Those were the initial observations of Thomas M. Ruli, an attorney with Juge, Napolitano, Guilbeau, Ruli and Frieman in his presentation to the Louisiana Claims Association at LCA’s 27th Annual Education Conference and Trade Expo held June 7-9 in Baton Rouge. Ruli’s topic was Workers’ Comp Fraud in Louisiana.
Ruli told adjusters and attorneys gathered for LCA’s conference that he intended to give them practical advice. In addition to judges’ biases Ruli told them how to identify fraud and how to use their evidence.
The first thing he wants to know when he gets a case is what district the case is in. “I can run through the judges in districts one through nine and tell you for which judges you better have your “T”s crossed and “I”s dotted and hope the claimant has a bad day, if you want to win fraud,” Ruli said.
For 31 years, Ruli has heard: A closed file is a good file. “One new medical report and the whole case changes,” he said. “Even if you have strong evidence of fraud, use it … to help the client get the case closed.”
Fraud statute
In a nutshell, under the fraud statute (1208) in Louisiana the claimant must make a willful misrepresentation; it must be a material misrepresentation, and it must be made for the purpose of obtaining workers’ comp benefits.
“If there is a willful material misrepresentation to obtain comp, claimants forfeit their right to comp,” Ruli explained. In addition, it is unlawful for any person to aid and abet, so he has a lawsuit against a claimant and the claimant’s father because they both lied.
Benefits are defined as the value of the indemnity, the cost of healthcare, the medical management, rehab, transportation and the reasonable cost of investigation and litigation. That is important, according to Ruli, because the workers’ comp insurer has a right to restitution. “You can’t always get it,” he said, “but you can get a judgment, and you can record the judgment. If the judgment is recorded and five or 10 years down the road, the claimant is moving on with his life and wants to sell property or buy real estate,” the claimant will have to satisfy the judgment first.
Ruli said he has received calls when someone is about to close on a property, and his judgment is holding up the closing. The claimant has “to deal with it because he committed fraud, and he has a judgment against him.”
He talked about the certification that goes to the employee warning about the fines and penalties for workers’ comp fraud. He stressed the importance of having that document signed and in the file because at trial this can be Exhibit A. “Anything you get them to sign,” you get to use at trial when you cross examine them, Ruli explained.
The claimant gets notice of a duty to report wages and earnings. If claimants do not, it is not a violation and there is no forfeiture. They are not lying about it. On the other hand, if they report that they are not working, and there is evidence that they are working, that is misrepresentation and forfeiture is required, according to Ruli.
Another instance of willful misrepresentation occurs when a claimant makes a false statement that there was not a prior injury for the purpose of obtaining workers’ comp benefits. Under today’s law, the claimant would forfeit benefits.
“For pure fraud no prejudice has to be shown for the employer to invoke it,” Ruli told his audience.
He gave examples of material misrepresentations: They lied about prior conditions; they lied about what they can or cannot do; they lied about whether they are working or they lied about the accident itself – whether it happened, whether it could have happened or whether it makes sense.
Whether a claimant omitting mention of prior medical conditions is material or not depends on the weight of the misrepresentation, according to Ruli. Is it significant? Is the false statement something that on its face looks as if the claimant is trying to hide for a reason? “The more treatment that was involved, the more recent the treatment, the longer he/she was out of work, the more invasive the treatment,” the more likely the misstatement is material.
Ruli talked about a case in which a fellow had a prior accident and did not disclose it. The accident took place seven years prior. The fellow made one visit to the emergency room and one follow-up visit to his primary care physician. When confronted, he said, “Man, I totally forgot about that.” The judge sided with the claimant, and said that the incident was so minor that it did not rise to the level of material.
Ruli described another case in which a lady has scoliosis which is pre-existing and congenital, she gets a patient out of bed, wheels the patient to the restroom and turns around to fix the sheet on the bed, “gets a spasm and locks up.” She calls 911 because she can’t move and goes to the emergency room. She describes the incident as an accident. Ruli’s doctor examines the claimant and describes her as overly dramatic. The doctor questions the veracity of the claimant’s contention that she never had a problem with her back before, given that she has scoliosis.
In deposition, the claimant told Ruli “12 times” that she had never had a problem with her back prior to this incident.
Her statements are contradicted by her fellow workers who say she complained regularly about her back. They say she has a boyfriend in Houston and would complain about problems with her back resulting from the drive to and from Houston.
Her statements are also contradicted by what she said on the ambulance ride to the emergency room. Ambulance records indicate she said she was having back pain the night before and took a hydrocodone without relief.
The insurer paid benefits until the ambulance records were obtained, according to Ruli.
She started her shift at 6:00 a.m., and the incident occurred at 6:45 a.m.
Ruli believes the evidence for a finding of fraud is compelling, but says it is not a sure thing.
Physical activities
Relative to physical activities Ruli explained that when the video surveillance contradicts the medical records, it is important that the surveillance of the claimant performing normal activity be “in close proximity to when they told the doctor they could not do something or are struggling to do something, or in close proximity to the deposition when they said they could not do” something.
Physical activities must be inconsistent with what they say they can or cannot do for a finding of fraud.
Unwitnessed accident
According to Ruli, the law says, “The plaintiff’s testimony alone is sufficient to carry a burden of proof that they had a compensable injury, unless there are facts or evidence which cast serious doubt on the plaintiff.”
Since a lot of judges do not like to find fraud, Ruli advised giving them an out by saying to the judge, “Even if you don’t find fraud, she does not meet her burden of proof under the law.” The Supreme Court is clear, Ruli said, that an unwitnessed accident is only compensable if the claimant is reliable and truthful.
Peel your bias back
“This area of law will make you cynical,” Ruli said. “You will think everybody is a fraud. They are not. You need to peel your bias back and realize that sometimes they are telling the truth.”
Ruli talked about a claimant who had an accident in February and in March through May medical records described the patient as moving slow, guarded, walking with a list and difficulty moving. Ruli obtained a video in July of the patient moving “perfectly fine.” Ruli could not get more recent medical narratives so took a deposition to find out whether the claimant got better.
The patient came to the deposition walking fine and said that, for the first two or three months life was difficult. He was stiff as a board and had a hard time straightening up. He started doing therapy and noticed in the last four to six weeks that he was standing upright more and walking more. He felt as though the injury was working itself out.
The point is Ruli was suspicious, but the man was not disposed to lie.
Ruli advised adjusters not to “rattle fraud” every time because you lose credibility with opposing counsel, and you lose credibility with the court.”
Mileage
Mileage is a benefit under the act, Ruli said. The Supreme Court did find that mileage fraud is 1208 fraud.
He used to see a lot more of it, but with Google it’s easy to find the distance between two points; however, if claimants turn in mileage on days they did not go to the doctor or the physical therapist and there is a pattern of behavior, the Supreme Court supports a finding of fraud.
Ruli told adjusters they need to know their “territory and the game.” He reminded his audience that it is the Workers’ Compensation Act, not the Employers’ Compensation Act.
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